Boston Startups, Put Your Hands Up!

Sometimes I think Scott Kirsner, Boston’s most prominent and respected tech journalist, has a bi-polar relationship with the Boston tech scene.

Shots Fired

In his most recent piece, titled, “Why Entrepreneurs Still Bolt from Boston,” Kirsner published the musings of a small group of entrepreneurs that left Boston for Silicon Valley. Twitter quickly erupted in a firestorm, with tech leader Mike Volpe advocating for a more even-keeled perspective:

The same rehashed points littered the page: restrictive non-compete laws, weak entrepreneur retention, lack of a betting culture from the angel investing and venture formation perspective, and a deep focus on serving the enterprise while ignoring consumer-facing products. Those arguments have been wrought out in dozens of articles and conversations, and while issues like reforming non-competes are still a black mark on the ecosystem, it’s difficult to complain when Boston’s innovation economy comes from a position of true strength in all these areas.

Add to that foundation the prominence of our educational institutions, diversity of expertise (biotechnology, robotics, healthcare, hardware, big data), and the fact that I overhear conversations on topics other than the next round of fundraising, disruption, achieving unicorn status, and growth hacking at my local watering hole.

It’s a Matter of Perspective

But the article’s implied takeaway? Boston is still a sieve. Our young, budding startup minds are leaving to build the next giants in NYC and the west coast. Silicon Valley envy bleeds through the page with every keystroke. Maybe this BU grad with the cool, bright green wire frame glasses just needs to be re-inspired by the Scott Kirsner of 2011. The guy who resolved to hit pause on comparisons with the Valley, to focus on being great and highlight what makes the tech economy in New England so awesome:

What if we stopped comparing and benchmarking? What if we stopped wondering whether we’re as innovative as New York or Silicon Valley? What if we stopped positing that New England in the 1970s or 1980s might have been more competitive than it is today? Basically, what I’m asking is: what if we put all comparisons on pause for 2011, and just focused on creating companies, solving big problems, and kicking a–?

I confess: I’m more guilty than most when it comes to making comparisons. But I promise that in 2011, I’m not going to give an exit interview to every entrepreneur who leaves Boston because they hope to do better in New York or the Valley, asking them to opine on Boston’s shortcomings. News flash: entrepreneurs can fail in those places too. When I’m at a panel discussion where the panelists start bloviating about the Valley versus Boston, or New York versus Boston, I’m walking out.

And the best part of all this? I think the Silicon Valley envy that seemed pervasive in decades past has finally been cleaned up like the Charles River. After spending the last seven years engrossed in Boston’s innovation ecosystem, I think the region has truly come into its own.

Are Startups Actually Leaving Boston?

Every once and a while, an article will hit the wire about a startup leaving Boston for greener pastures elsewhere. For those who left, it always seemed like a natural progression. My friends at music startup Cymbal recently moved to NYC to avail of a strong music scene…makes sense. And yes, it’s natural to dream wistfully about what would have happened if Mark Zuckerberg, Drew Houston, and Joe Gebbia grew Facebook, Dropbox, and Airbnb in the same region in which they graduated. This all begs the question: are startup departures the exception or the rule?

To test this question, I decided to check in on the 86 startups identified in Kinvey’s Startup map, released in March 2013. How many startups were acquired, died, and continued to grow? More importantly, how many left the region? I did some digging (see bottom of page), and what I found wasn’t surprising:

The Verdict: Boston Startups are Staying in Beantown and Succeeding

2 (3%) moved away (OSComp Systems to Houston and Plastiq to Silicon Valley)

These statistics are incredible, even if some of the startups aren’t still in hyper-growth mode or some of the acquisitions were actually acquihires. The Kinvey data set also erred toward well-known, growing startups at the time of publication. In addition, I did not limit the data set to startups at/near their founding. Regardless of these caveats, we can draw some conclusions:

Startups who begin in Boston typically build their businesses and exit in Boston

The few companies that leave seek the epicenter of their chosen industry

Yes, some exited founders and developers head to Silicon Valley to become investors, engross themselves in the Valley culture, and start/join new ventures. The same can be said of serial entrepreneurs coming to Boston from all over the world to start their next venture.

The Kids are Alright

The comings and goings of entrepreneurs is natural. Boston’s startup culture is different from anywhere else in America, including Silicon Valley, and that’s ok. Founders can and do succeed in Boston even though more venture capital is invested with faster velocity to startups in the Bay Area. The best Boston startups still get funded.

Maybe we overhaul the marketing message, starting with the local tech press. Maybe we put some force behind the “Built in Boston” movement. I don’t believe we have Silicon Valley spite, so let’s embrace our Boston bravado.

Scott, I know these Boston vs. Silicon Valley articles drive some of the highest page view counts each year, but it’s hurting how our startup ecosystem is perceived across the country. You have the loudest microphone in Boston tech, let’s not kill ourselves by a thousand little cuts.